Corporations Do Not Commonly Use the Direct Method for the Statement

question 57

Multiple Choice

Corporations do not commonly use the direct method for the Statement of Cash Flows because

• A) they do not have easy access to the necessary information.
• B) FASB prefers the indirect method.
• C) the direct method does not follow GAAP.
• D) there are fewer disclosures required under the indirect method.

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Definitions:

Binary Language

The fundamental language of computers, consisting of just two numbers, 0 and 1, to represent all types of data and instructions.

0s And 1s

Represents the binary number system fundamental to computing, using only two digits: 0 and 1.

Computers

Electronic devices that can be programmed to carry out sequences of arithmetic or logical operations automatically.

Inkjet

A type of printer that creates images by propelling droplets of ink onto paper, widely used for home and office applications.